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AIBU?

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Original poster

Would you take this mortgage rate?

53 replies

Hangrysaurus · 29/09/2022 14:00

3.7% 80% LTV £1250 per month?

or 3.7% 75% LTV at £1100 per month

or would you keep as it 2.2% £750 per month with a deal that expires next December?

genuinely having panic attacks over this

OP posts:
Quitelikeit · 29/09/2022 16:12

Stick it out.

apparently the give away by the Tories is supposed to kickstart the economy. The govt spokesman said on GMB today that the rates should start coming down in April of next year.

don’t pay it off your loan unless the value of your house crashes then pay it off!

Original poster
Hangrysaurus · 29/09/2022 16:23

Quitelikeit · 29/09/2022 16:12

Stick it out.

apparently the give away by the Tories is supposed to kickstart the economy. The govt spokesman said on GMB today that the rates should start coming down in April of next year.

don’t pay it off your loan unless the value of your house crashes then pay it off!

Oh I didn’t see that.

the 3.7 is getting pulled on oct 1st it’s lloyds club lloyds exclusive just in case that helps anyone

others were 4.5, taking payments to over 1500, absolutely mental

OP posts:
Stuckinthemiddle1990 · 29/09/2022 16:24

@Rosesandteacups

Snap. I've got in contact with my MB today to see what his thoughts on it are. This is my 1st mortgage and loathe the uncertainty of it all. Even if MB can pull something relatively sensible out of the bag my DH is determined to stick. We are currently on 1.64%, he is convinced we can get something around the 2.5% next year. I think he's being incredibly naive to think we could get anywhere near that....

....but then neither of us are economists!

caffelattetogo · 29/09/2022 16:28

This is a horrible situation isn't it? The banks will be making a fortune out of all these early repayment charges. Bankers' bonuses will get another boost. This Tory government is worse than Johnson!

ClaudineClare · 29/09/2022 16:34

apparently the give away by the Tories is supposed to kickstart the economy. The govt spokesman said on GMB today that the rates should start coming down in April of next year

This is what the government hopes will be the result of the madcap plan. I will be very surprised if things start to improve in such a short time.

boxybox · 29/09/2022 16:36

The govt spokesman said on GMB today that the rates should start coming down in April of next year.

so when are they going to hit 6%?

boxybox · 29/09/2022 16:37

I personally can't see rates much lower that 3.7 next Dec so would fix for peace of mind.

ClaudineClare · 29/09/2022 16:39

Predictions that the base rate will continue to rise until at least July next year.

moneytothemasses.com/owning-a-home/interest-rate-forecasts/latest-interest-rate-predictions-when-will-rates-rise

friendlycat · 29/09/2022 16:40

I would take with a very great pinch of salt what the govt spokesman said this morning on GMB.

The Bank of England sets interest rates not the government. Listen to what the BoE are saying.

DollyTots · 29/09/2022 16:46

Oh gosh. We’re in a similar boat. Offered 3.7% fixed for 5 years, 30 year term for £1300 a month but that covers our mortgage/HTB/car loan. Currently £900 a month.
We worked out we were slightly better off consolidating this way and frankly, I want clear of the hold help to buy has.

Fififafa · 29/09/2022 16:55

This

parkrunner1977 · 29/09/2022 16:58

Have you started repaying the HTB loan yet? If not when does that kick in?

Fififafa · 29/09/2022 17:00

I doubt that mortgage rates are going to fall anytime soon. Aren’t interest rates predicted to be about 6% next year? What do you think happens to mortgage rates if the BOE increases interest rates? 3.7% is reasonable. I’d take it, depending on how much your early redemption fee would be.

Original poster
Hangrysaurus · 29/09/2022 17:03

parkrunner1977 · 29/09/2022 16:58

Have you started repaying the HTB loan yet? If not when does that kick in?

Year 5 aka jan 24 for us

OP posts:
Iliveonahill · 29/09/2022 17:06

I would wait until next Dec. In the meantime I would overpay.

Rosesandteacups · 29/09/2022 17:06

It’s all a game of Russian roulette at the moment. Nobody knows but I’m not sure everyone jumping ship and paying ERFs to break their fix deals is the right thing. They do expect rates to go up and come back down again so even if we sat on a SVR for a year or so until we fix at something more affordable at least we have the next year with our current repayment.

GreenLunchBox · 29/09/2022 17:07

friendlycat · 29/09/2022 16:40

I would take with a very great pinch of salt what the govt spokesman said this morning on GMB.

The Bank of England sets interest rates not the government. Listen to what the BoE are saying.

Yes, it's astonishing that anybody believes what this government says after the last three years.

The market is expecting BoE rates of 6.25% by May next year, so this will translate to mortgage rates of 7-8%

Original poster
Hangrysaurus · 29/09/2022 17:07

Fififafa · 29/09/2022 17:00

I doubt that mortgage rates are going to fall anytime soon. Aren’t interest rates predicted to be about 6% next year? What do you think happens to mortgage rates if the BOE increases interest rates? 3.7% is reasonable. I’d take it, depending on how much your early redemption fee would be.

It’s more of a cautionary prediction ie rates could go as high as 6%, to me it seems comparable to energy, in the sense that we’ll never see interest rates around the 1s again for a long long time. I think the BoE want this idiotic government to reverse their 45% tax scrap. Objectively it makes no sense to crash the housing market but then when has this government done anything that makes sense

OP posts:
Original poster
Hangrysaurus · 29/09/2022 17:08

^ by rates I meant the base rate

OP posts:
Original poster
Hangrysaurus · 29/09/2022 17:17

Just been in contact with lloyds and they don’t touch htb for anyone that’s looking at that deal so you’d have to either pay it off in full and be done with it or keep it as separate.

looks like we’ll have to stay out and hope

OP posts:
GreenLunchBox · 29/09/2022 17:18

The prediction was a peak of 4% only last month. I think the predictions are only going to get worse

Fififafa · 29/09/2022 17:19

Hangrysaurus · 29/09/2022 17:07

It’s more of a cautionary prediction ie rates could go as high as 6%, to me it seems comparable to energy, in the sense that we’ll never see interest rates around the 1s again for a long long time. I think the BoE want this idiotic government to reverse their 45% tax scrap. Objectively it makes no sense to crash the housing market but then when has this government done anything that makes sense

Show quote history

Agree that nothing is certain and I guess you have over a year to go where you could continue to pay at a lower rate. We’ve just fixed for 5yrs at a slightly lower rate than 3.7, but our fix ends this year.

caringcarer · 29/09/2022 17:21

I have 3 btl mortgages on lifetime trackers. Currently tracking at 1.25 above base rate so 3.5. I have found a 5 year fix for 4.03 as 60 percent LTV. I have tenants in the houses all with you g children and I desperately did not want to increase rent and felt if I did not fix now rates would sky rocket higher and so many btl deals have been withdrawn there are few left. I thought to give tenants certainly I had to act. As it is I can just increase rent in 2023 by under 5 percent. If I had not fixed and rates had sky rocked I would have had to increase much more. It is tough times. I personally think rates are only going upwards to 6 per cent base rate so p my mortgage would have been 7.25. I have taken the hit on buying out of current deal. I hope markets more stable in 5 years time.

Original poster
Hangrysaurus · 29/09/2022 17:27

Rosesandteacups · 29/09/2022 17:06

It’s all a game of Russian roulette at the moment. Nobody knows but I’m not sure everyone jumping ship and paying ERFs to break their fix deals is the right thing. They do expect rates to go up and come back down again so even if we sat on a SVR for a year or so until we fix at something more affordable at least we have the next year with our current repayment.

That’s it isn’t it, Russian roulette , you pay your money and make your choice . Before tax and deductions, hubby and I earn around 87k, so I think it’s fair to say above average, if these deals can bring us to our knees then what hope is there for the majority. What are we going to see, mass home repossessions for teacher, policemen, nurses, jnr drs, bank workers. I mean it’s insanity, especially with everything else up in the couds price wise. It’s ruination for the majority. That can’t be the bolstering economy the tories want

OP posts:
parkrunner1977 · 29/09/2022 17:27

I think the way I would look at this is your ECR over the term left works out at around £300 a month. The new rates are a further £350-£550 per month. So that's between £650 & £850 a month more that switching will cost you.

Use a mortgage calculator to see what the interest rate would need to be for you to be paying that difference. If it's only 4% or 5% then maybe you are better off switching now, if it's higher say around 7% or 8% than I would probably stay put for now and hope they don't end up that high. You can reassess each time the base rate changes.

Save the difference you would have had to spend to switch and use that to reduce your balance when you remortgage, or overpay on your current deal.